Thursday, January 31, 2008

It would appear that the procedures followed in BCE’s sale to Teachers’ do not comply with Teachers’ own corporate guidelines under Section 3.2 "Going Private Transactions," "Leveraged Buyouts" And Other Purchase Transactions, available by clicking here.

And which states:“In addition to such an economic analysis, we will review the process by which the proposal was received. In this regard, we will consider whether:

* Other potential bidders have had an opportunity to investigate the company and make competing bids”

“The directors of BCE Inc. were kept in the dark about offers for the telecom giant by managers and advisers who manipulated the bidding process to freeze out bondholders in the sale of the company, lawyers for the bondholders said Monday.

The court was reminded that three BCE directors - Tom O'Neill, Jim Pattison and Donna Kaufman, the head of the strategic oversight committee - testified they were unaware or couldn't remember seeing all the details of the bids or how they would affect all stakeholders.”

As well as the following suppressive action by BCE concerning a “competing bid”, which was never disclosed to shareholders or the reasons behind its non-adoption:

Surely these standards that Teachers' laid down for other issuers to adhere to in like circumstances in which Teachers is a passive shareholder, apply equally to situations like BCE where Teachers' is driving the bus, or will it be a case of the shoe is now on the other foot?

Today's situation and fact pattern will be a true test of whether Teachers' actually believes in good corporate governance for all, or simply as a point of leverage for Teachers' as a large shareholder seeking advantage over other smaller shareholders.

That's actually a very easy moral question to answer. Simply ask any of Teachers' 271,000 pension beneficiaries, and they will tell you that no one likes a schoolyard bully. That's as true for Canada's public capital markets as it is for the school yard jungle jim.

EVENTS

Income Trust Halloween VigilThanks to all who participated in both the Ottawa and Calgary vigils to mark the anniversary of the announcement.

WE"D LIKE SOME ANSWERS

As you well know, the ‘income trust thing’ has grown beyond the
question of whether fair taxes are paid on income from trusts. It’s
become a giant dirty snowball, and as it rolls forward it accumulates
more and more bulk. There are so many unanswered questions. Let's list a few and invite our "Accountable" government and our free press to provide some much-needed answers.

It is said “Trusts are inefficient use of capital. Why?” Two
related questions are ‘Whose money is it, anyway?’, and ‘Do Canadian
investors have a free and efficient market?’

How can information that is already in the public domain at SEDAR
make for a state secret? How could such information be used to harm
the Canadian national interest? And who would cause the harm?

Why won’t the Canadian media investigate the falsehoods and
misrepresentations told by the Minister of Finance to a committee of
Parliament? Was the Minister in contempt of Parliament?

Why won’t the Canadian media report (a) government tax revenues
gained from BCE in 2006 when BCE was a corporation to (b) government
tax revenues that would be gained in 2007 from BCE, if BCE had been
allowed to proceed to a trust, and (c) government tax revenues that
will be gained in 2007 from BCE, when BCE ownership has been carved
up as 45% foreign ownership and 55% large Canadian pension fund
ownership?